The firm. which only caters to cross-border transactions, evaluates options in domestic market transactions
California-based online payments firm PayPal is evaluating options to extend its offerings to the Indian domestic market, dominated by Alibaba-backed mobile payment and commerce platform Paytm.

PayPal’s Indian unit has so far been focusing on cross-border transactions from India and is evaluating options for the domestic market, buoyed by the growth in India’s online commerce, Vikram Narayan, Paypal’s Managing Director and Country Manager for India told The Hindu in an exclusive interaction.

“As far as Indian ecommerce is concerned, it is just a start of the journey. We are a long-term player,” he said.

The company, he said, is focused on serving the cross-border market. “We are seriously evaluating options on how can we serve the domestic market through our products and services,” Narayan added. India’s e-commerce market is expected to breach the $100-billion mark by FY20, according to Goldman Sachs. The overall online market, including travel, payments and retail in the country could reach $103 billion, the US investment bank said.

“India has great potential and we would want to serve this market in a compliant manner. The macro-economic and regulatory environment has been extremely positive. It is a question of evaluating how we enter the market,” Narayan said.

PayPal has faced issues with banking regulator Reserve Bank of India (RBI) in the past. The RBI had wanted PayPal to transfer the money to banks within a pre-determined time frame instead of holding it in its online account. In effect, it only allowed PayPal to function as a payment gateway, limiting the scope of its platform.

Mr Narayan said all is well between the firm and the RBI. “PayPal has established a very solid compliance track record with RBI. We have worked proactively with RBI to help merchants of all sizes tap into the global market more easily by passing on their feedback to RBI,” he said.

In its report dated April 29, 2013 on services and facilities to exporters, RBI has highlighted the role of PayPal as a model to grow e-commerce-driven exports and suggested increasing the limit for export-related payments, he added.

PayPal has been operating in India under the Online Payment Gateway Service Providers (OPGSP) guidelines since October 2011. In June 2013, RBI had increased the limit for export-related payments for goods and services via OPGSP to $10,000 from $3,000 per transaction.

In India, PayPal has been working to enable local Indian businesses of all sizes to expand across borders, reach a global network of 173 million customers in 203 countries, and receive immediate payments via PayPal for the goods and services they export.

Asked about the timing and mode of entry, Mr Narayan said the firm would make announcements regarding its Indian business in due course. If PayPal decides to cater to the domestic market, it needs to compete with a slew of payment platforms in India.

When people refer to ‘PayPal competitors’, they are referring to businesses that compete with one part of PayPal’s end-to-end payments solution, like the front-end of a payment (Apple Pay, Android Pay) or the backend processing (Stripe) or even the payment method (Visa, MC), he added.

“Competition is always good for the larger ecosystem of any business to progress and innovate. PayPal is the most trusted, widely-used digital wallet in the world,” Mr Narayan said.

He added that PayPal is in a unique position in that it’s not just an agnostic payment platform, but is also a gateway, a merchant account, a payment method, a digital wallet and a payment processor to both consumers and merchants. “It’s every single one of these things, integrated end-to-end in a platform that delivers more seamless commerce in a hyper-connected world,” he added.